CMS Plan Formulary and Cost-Sharing Information Reveals Continued Shift to Five-Tier Formularies

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In early October, CMS released the Medicare Part D plan formulary and cost-sharing information for the 2014 benefit year.
Please note: This is an archived post. Some of the information and data discussed in this article may be out of date. It is preserved here for historical reference but should not be used as the basis for business decisions. Please see our main Insights section for more recent posts.

Avalere analyzed the data using its proprietary DataFrame® database, which includes all stand-alone prescription drug plans (PDPs) and Medicare Advantage prescription Drug Plans (MA-PD). This analysis identifies noteworthy trends specific to 2014 Medicare Part D plan formulary designs that may impact beneficiary access to prescription drugs in 2014 and beyond.

Below are select highlights from the analysis:

    Number of PDPs Offering Five-Tier Formularies Will Increase: Approximately 84 percent of plans will

    have five or more tiers in 2014, up from 67 percent in 2013.

    Majority of PDPs Will Continue to Use Specialty Tiers: 93 percent of Part D plans will utilize at least one specialty tier in 2014, compared to 90 percent in 2013.
    Five-tier PDPs With One and Three Coinsurance Tiers Will Be More Prevalent: In 2014, roughly 75 percent of five-tier PDPs will utilize one coinsurance tier, while 20 percent of five-tier PDPs will utilize three coinsurance tiers. This trend may gradually increase average cost-sharing across the market as a whole.
    Utilization Management Will Increase: Use of prior authorization, step therapy, and quantity limits will increase slightly from 2013 to 2014.
    Low-Cost PDPs Continue to Differentiate Cost-Sharing for Preferred Versus Non-Preferred Pharmacies: By requiring higher cost-sharing at non-preferred pharmacies, low-cost PDPs such as AARP Saver.

Open enrollment in the MA and Part D markets is already underway (started on October 15) and runs through December 7. The 2014 plan year begins on January 1, 2014.

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